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Sunday, January 13, 2013

Bergamot T

I first notice this T back in October 2012 in this post (link). Although I called it Advance-Decline T, it's technically a McClellan Oscillator($NYMO)  T.
Now i am no expert in T Theory, but from what I remember of work of  late/great Terry Laundry this one is a finely brewed Bergamot T.  His famous Advance-Decline(A/D) Oscillator looked really really similar to NYMO, and since he never revealed how exactly he calculated the thing, well, NYMO it is.

Traditionally, T has a centerpost at A/D split double-bottoms. The problem with this is that Nov 15 and Dec 28 bottoms may be too far apart, not only in time but also in price level of NYMO. Even forget about oscillator, SPX hardly looks like double-bottom. All that aside it projects into summer 2013, which is entirely possible.
Conservatively, T starts at left bottom, and since it is  no doubt a V-bottom on SPX and extreme reading on NYMO - here you go - rally into spring. T End Date will be sometime in April, I will figure out the date when we get there.
Overall it looks like the same scenario as two previous years - ramp into spring, summer range, double or multiple top and crush.
More tea, dear Sir?

Later that day we had a wonderful discussion here:
Darth_Gerb replied to you
All very good.  and I reviewed the old chart just to refresh.
The smallest T, ending soon, I fully agree with.
The descending NYMO highs created the thick brown line, and the plunge to -100 and resultant skyrocket up, created a break in that line, which defines a shift from accumulation to distribution.
The other two larger T's however nice, I disagree with and I'll share my opinion and what I've learned from  Terry.  The low near NewYears was not low enough.  In fact it doesn't even qualify at -40.  Go look at the earlier 2 year chart.  only lows of -80 would I consider.  Terry said, "if a low doesn't go low enough, then the rebound is weak, typically in creating a fail setup where there just isn't enough buyers and confidence to go higher."
The T into spring has a shot at being legit, but there is no guarantee where the price of SPX would be at that time.  It would be something to jot down in your notes/calendar 'to keep an eye on'.  Otherwise, you've got T theory in your blood.

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